ITAT Mumbai Overturns Rs. 70 Lakh Addition on Property Purchase, Citing Lack of Evidence

The Income-Tax Appellate Tribunal (ITAT) in Mumbai has ruled in favor of the assessee, Deepti Shreyas Talpade, by deleting an addition of Rs. 70 lakh to her income. The ruling was based on the lack of substantiated evidence for the alleged cash payment in a property purchase.

The case, heard on October 13, 2025, and decided on October 31, 2025, involved an appeal against an order dated February 20, 2023, issued by the Learnt Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi. The matter pertains to the assessment year 2011-12.

It is noted that the appeal was filed 380 days late. The assessee submitted an affidavit and application for condonation of delay, citing her husband's health issues, specifically an angioplasty in December 2023. Angioplasty is a medical procedure to open narrowed or blocked coronary arteries, often caused by a buildup of plaque. Due to her husband's health condition, the family was unable to focus on the legal matter during this period. The authority accepted the reason as genuine and condoned the delay.

On December 03, 2011, the assessee filed her income tax return (ITR) for the assessment year 2011-12, disclosing a total income of Rs. 11,50,550. The assessing officer, during the assessment, added an extra amount of Rs. 70 lakh to her income, alleging that she paid this amount in cash beyond the registered value when buying a house in the Cosmos Regency project in Thane. The tax authority claimed this income was unaccounted for and made a protective addition under Section 69B (unexplained investment).

The tax authority reopened the case based on information from a search under Section 132 on the Cosmos Group. They alleged that Ms. Talpade paid Rs. 70 lakh in cash on top of a registered value of Rs. 29.50 lakh for the property. However, the assessee denied this claim, stating that the entire purchase amount was paid by cheque, as per the agreement.

The assessing officer did not accept her claim and added Rs. 70 lakh to her income on a protective basis. The same addition had previously been made to the income of the assessee’s husband, Shreyas Talpade, in a related case. However, the ITAT had already ruled in his case that the allegations of cash payment were baseless.

When the case was taken before the ITAT Mumbai, the tribunal examined all the real estate documents and found that the flat was spread over an area of 710 square feet, with a stamp duty value of only Rs. 15.38 lakh, not Rs. 70 lakh. The registered purchase amount was Rs. 29.50 lakh, paid by cheque and bank loan. The tribunal endorsed the assessee’s claim that the purchase payment was made via cheque, not through cash, and that the addition by the AO was based only on suspicion, not evidence. Therefore, the tribunal deleted the Rs. 70 lakh addition to her income, allowing the appeal.

This ruling provides a significant relief to the assessee and highlights the importance of substantiating claims with concrete evidence in tax disputes.